Paying Back Student Loans the Easy Way

Graduating from medical school looked like a dream come true, I got a brand new white coat, some business cards, even a stylish haircut. Everything seemed to be going my way, that is, until the loan repayment process kicked in. As a graduate of Texas Tech Medical School, I accumulated over $160,000 in medical school debt! That is more than 3 times what the typical US graduate accumulates in student debt. In addition, that does not include interest or the undergraduate loans I borrowed from before medical school. My first reaction was that I would need to live in a box and eat free crackers and peanut butter at the hospital. But then I learned about the payment service options my lenders provide and it turns out that paying off this daunting amount is merely an exercise in discipline. Anyone can do it!

As a medical resident, our salaries range around $40k-50k per year. Subtract taxes and that leaves about 2/3 of that amount remaining. Factor in cost of living, books, food and video game money and I only take home about $600 a month. But the monthly payments on loans are in the $1000-$2000 range. Well it turns out that the government can be quite understanding. By applying for income based repayment, the loan payback period is extended and I only have to pay around $500 a month. That leaves me with a little extra money in case I want to eat out or buy an Xbox Live subscription. There is also an option to defer payment without having to pay anything until you make a more comfortable salary. That will ultimately increase the total amount borrowed with the accumulated interest but it may be a viable option for those that think they can pay it off down the line.

Although I am a resident making around minimal wage once hours of work are factored in, I estimate that I will make around $150k to $1 million per year after completing residency. I can probably pay back the full amount in 3-4 years comfortably. Therefore, I feel a medical degree is still ultimately worth the trouble provided that one completes all 4 years. Nothing would be worse than dropping out during the 3rd year and accumulating $100k in loans with no job in sight. Could that $160k figure been smaller? Possibly, tuition is the main expense but there were times I indulged at Chili’s instead of eating peanut butter and water. A little discipline back then would have definitely helped my financial situation today but as long as I keep spending under control, there is more than enough for me and my student loans.

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